What is Employer National Insurance?
National Insurance contributions are a key part of supporting the UK, helping fund healthcare, retirement benefits & more. Employers play an essential role in this system, contributing a percentage of employees’ earnings above a set threshold.
Key Facts about the Increase
- The NI contribution rate for employers will increases from 13.8% to 15% from April 6th 2025, our payroll software will be updated to be in line with this.
- Employers across industries, particularly those with larger workforces, may see a slight rise in their payroll costs.
- Ensure you’re aware of the latest thresholds for Class 1 Employer Contributions (link below).
How Will This Impact Small Businesses?
To support small businesses, the Employment Allowance (EA) will be increasing from £5,000 to £10,500 and the current Employment Allowance cap will be removed. Meaning employers with employers NIC liability over £100,000 in the previous tax year, but would be otherwise eligible, will now be able to claim the £10,500 EA.
How This Affects Your Business
- Employers will pay more NI contributions per employee earning above the secondary threshold (£5,000 per year)
- Minimum wage will be increasing to £12.21 from April 1st
- Use this as an opportunity to assess your budget and explore ways to grow and adapt your business.